The ailing economy may have gotten its last dose of bracing tonic for a while. The Federal Reserve is hoping it won't have to refill the prescription.

The Fed cut interest rates to the lowest point in nearly four years Wednesday as the nation teetered on the edge of recession. In fact, the Fed's trim was smaller than those of recent months amid indications the central bank might pause to see whether months of powerful rate cuts and billions of dollars in stimulus checks will be enough to lift the country out of its slump.

Chairman Ben Bernanke led a divided Fed, in an 8-2 vote, in slicing its key rate by one-quarter percentage point to 2 percent.

In turn, the prime lending rate for millions of consumers and businesses fell by a corresponding amount, to 5 percent. The prime rate applies to certain credit cards, home equity lines of credit and other loans. Both rates are the lowest since late 2004.

The Federal Reserve, which has been dropping rates since September, turned much more forceful early this year when housing, credit and financial problems worsened. Rate reductions in January and March alone marked the most aggressive intervention in a quarter-century in an effort to re-energize consumers and businesses.

"Recent information indicates that economic activity remains weak. Household and business spending has been subdued and labor markets have softened further. Financial markets remain under considerable stress, and tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters," a statement announcing the rate cut said. "The Committee expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization. Still, uncertainty about the inflation outlook remains high. It will be necessary to continue to monitor inflation developments carefully."

Earlier this year, the Fed had cut rates by three-fourths of a percentage point two different times and by a half-point cut at another meeting.

The reduction of the Fed funds rate could help people who owe money by easing interest on variable-rate credit cards and adjustable-rate mortgages. Anyone facing an ARM reset still should expect higher payments, but not quite as high as they might have been otherwise.

The prime interest rate, which variable-rate credit cards are tied to, is generally 3 percent higher than the Fed funds rate. The prime rate increases and decreases the same amount as the Fed funds rate does.

Longer-term, fixed-rate loans such as mortgages or student loans track treasury bonds, so these won't shift in response to short-term rate adjustments. Car loans also are typically fixed rate and would not be affected by the Fed rate cut.

The downside of an interest rate cut is that if you're trying to save your money, returns may fall. The Fed cut will reduce the rates you've been earning on your money that sits in high-yield, interest rate-bearing accounts.

When the results of the cuts will be seen is another question.

Rate cuts have been continuing since September. The Fed's fund rate has dipped from 5.25 percent to 2.25 percent over that time. In January alone, the Fed cut the rate by 1.25 percentage points. It was the biggest one-month reduction in a quarter-century.